Posts Tagged: "Bayh-Dole"

A principal purpose of the Bayh-Dole Act of 1980 was imposing a uniform patent ownership policy on all federal agencies. Previously, agencies took rights to inventions made with their funding, but over the years they had developed a multiplicity of often conflicting procedures for filing appeals, with some agencies having different policies for different programs. The resulting confusion made companies crazy trying to navigate through them. The burden was particularly heavy on small businesses. The Bayh-Dole Act established a uniform policy requiring all agencies to waive invention ownership to those making patentable discoveries with their support. It also allows agencies to deviate from automatic contractor ownership of  inventions in exceptional circumstances: “when it is determined by the agency that restriction or elimination of the right to retain title to any subject invention will better promote the policies and objectives of this chapter.” 

Thirty-one signatories from 29 center-right public policy organizations have written U.S. Health and Human Services Secretary Xavier Becerra, urging him to deny a petition from Knowledge Ecology International that requests use of march-in rights under the Bayh-Dole Act against the prostate cancer medicine, Xtandi. The conservative organizations represented on the letter include some of the most prominent center-right groups, such as the American Conservative Union, Americans for Prosperity, Americans for Tax Reform, the Competitive Enterprise Institute, Eagle Forum Education & Legal Defense Fund, FreedomWorks Foundation and Heritage Action for America. Conservatives for Property Rights led the letter initiative.

The lead story in last weekend’s Wall Street Journal made an exciting announcement: “Merck Covid-19 Pill Cuts Risks of Hospitalizations and Death”: “Merck & Co. and its partner Ridgeback Biotherapeutics LP said their experimental Covid-19 pill helped prevent high-risk people early in the course of the disease in a pivotal study from becoming seriously ill and dying, a big step toward providing the pandemic’s first easy-to-use, at home treatment.” In case its readers missed the significance, the same issue included an editorial, “There May Soon Be a Covid Pill”, stating: “In what is rare good news these days, Merck and Ridgeback Biotherapeutics said Friday that their Covid pill molnupiravir reduced hospitalizations by about half… Since the beginning of the pandemic, doctors have been hoping for an oral antiviral that could prevent recently infected patients from getting sicker… Merck has also signed licensing agreements with generic manufacturers to accelerate the pills availability world-wide. Manufacturers in low-income countries don’t need special expertise and supervision to produce the pills, unlike with Covid vaccines. Molnupirvir can be easily distributed in poorer countries… Evidence also indicates that the drug is effective against different variants and is unlikely to produce viral resistance.” The partnership between Emory University, Ridgeback Biotherapeutics and Merck could turn out to be one of the most significant Bayh-Dole alliances ever, yet just a few months ago all three were under fire. And the critics are renewing their attacks.

Sensing an opening after the Biden Administration’s recent Executive Order put a hold on a pending regulation prohibiting the misuse of the march-in rights provision of the Bayh-Dole Act for price control, Congressional opponents of the law dusted off a ploy that failed in the Obama Administration to try their luck again. They’ve written to Secretary of Defense Lloyd Austin and Health and Human Services Secretary Xavier Becerra urging them to march in to control prices of drugs created from inventions arising from R&D their agencies supported. We likened that aspect of the Executive Order to shooting ourselves in the foot, and it seemed as though it would be a while before we would know if the Administration would pull the trigger or not. With the recent Congressional actions, the day of reckoning may not be far off.

Late Friday, the Biden Administration unveiled what must be one of the longest Executive Orders in history, titled “Promoting Competition in the American Economy.” In 31 pages, it covers everything from agriculture, shipping and railroads to the internet. The aim is to promote a “fair, open and competitive marketplace” against the threats of “excessive market concentration.” Among the intended beneficiaries are entrepreneurs, who will receive “space to experiment, innovate, and pursue the new ideas that have for centuries powered the American economy and improved the quality of life.” Unfortunately, tucked away on page 28 is a directive to the Secretary of Commerce that could threaten to undermine the Bayh-Dole Act, which allows entrepreneurs to commercialize federally-funded inventions. The law has spurred the impressive formation of academic spin-out companies and resulted in approximately 70% of these discoveries being licensed to small companies. It’s also critically important to our economic growth and continued well-being.

The new Presidential Administration has hardly settled in before being confronted with a stark choice: will they continue policies that foster public/private sector R&D partnerships or be diverted down a path that’s been a dead-end? President Biden faces two herculean tasks: getting the COVID-19 pandemic under control while reviving the economy. The problems are intertwined and require continuous innovation to overcome, which means tapping the best minds in our public and private sectors. We’ve just witnessed a modern miracle, as such partnerships seamlessly came together to create effective COVID-19 vaccines and therapies in record time. But the policies these collaborations depend on are now being questioned.

It may seem odd, as unprecedented public/private sector R&D alliances work to discover and develop therapies to counter COVID-19, that some are trying to punish the companies trying to get us out of this mess. For example, House “Progressive” leaders unveiled the  “three protections”  they will try to insert in the next Congressional aid package, beginning with this: “NO EXCLUSIVITY: Pharmaceutical manufacturers should not be granted exclusivity for any COVID-19 vaccine, drug, or other therapeutic-whether it has been developed with U.S. taxpayer dollars and publicly funded, or not.” Consider the last phrase. They would take away rights to technologies developed entirely with private funding without evidence of any public need for doing so.

The world is teetering on the brink of a public health and economic catastrophe, depending on emergency partnerships between our public and private sectors to develop a successful treatment for the coronavirus. If there was ever a time to be thankful that we have policies in place making that possible, it’s now. But there are those who want to use this crisis to return to the failed policies of the past. Here’s the bottom line: the Bayh-Dole Act works. It allows the private sector to collaborate with universities and federal laboratories, like the National Institutes of Health, knowing that intellectual property they bring into such partnerships will be protected. It also allows academic institutions and federal labs to determine what type of license is best suited to promptly commercialize their inventions.

Almost a third of the recently signed $8.3 billion bill to fund the United States response to the coronavirus outbreak is devoted directly to vaccine research and development. And while the realities of drug development and FDA approval mean it is unlikely any vaccine will be available before next year, the government has numerous tools at its disposal in seeking to reduce the strain on the nation’s health care system. As many as nine different pharmaceutical companies worldwide are rushing to develop a safe and effective vaccine. Some are using traditional vaccine methods, including testing previously developed vaccines for other viruses. Others are using new technology to address the outbreak. The rush to find and deploy a coronavirus vaccine raises several interesting legal and regulatory issues, including balancing speed with efficacy, understanding ownership, and vaccine costs.

It’s highly appropriate that the 40th anniversary of the Bayh-Dole Act occurs in a year as politically contentious as that in which it passed. In 1980, many predicted that our best years were behind us and that the United States would soon lose its place as the world’s economic superpower. Experts proclaimed the best remedy was to adopt the “Japan, Inc.” model,  where the government  bureaucracy orchestrated a coalition of dominant companies boldly plotting the future (that idea was particularly popular with many in Washington, D.C.). The patent system was under constant attack for being unfair, the U.S. suffered from double digit unemployment and inflation (dubbed “the misery index”) and energy costs skyrocketed. Congress discovered that despite billions of dollars invested annually in federally funded R&D, few inventions were being brought to the marketplace where they could benefit the American people. It felt like the bottom had fallen out from under the feet of our nation. To remind us how far we’ve come—and prevent us from sliding back into the morass—stakeholders across the innovation spectrum have come together to form Bayh-Dole 40. This coalition of industry, academic, policy organizations, venture capital and others (including IP Watchdog) will host a series of events, briefings, papers and other activities explaining the importance of the incentives and authorities of our intellectual property system as embodied in the Bayh-Dole Act, to our prosperity and continued well being.

One of the few areas of bipartisan agreement in Washington is that it’s time to respond to Chinese economic and military aggression. The need is underscored by a sobering report from the Senate Homeland Security & Governmental Affairs Committee’s Permanent Subcommittee on Investigations titled “Threats to the U.S. Research Enterprise: China’s Talent Recruitment Plans.” The report documents how China exploits our culture encouraging the open exchange of science in order to achieve their commercial and military objectives. In its editorial, “China’s Bid on American Science,” The Wall Street Journal aptly summarizes the report:  “It found the U.S. government is funding research for hundreds of scientists at American universities and labs who are effectively under contract to turn over their findings to China.” No nation can allow others to steal its cutting-edge technologies. While we must effectively respond to China and others looking to do us harm, we must avoid inadvertently undermining the policies which made us the leader in turning government funded R&D into highly innovative products. Unfortunately, an initial agency response is not reassuring on that score.

In late August, the U.S. International Trade Commission published a notice of institution of a Section 337 investigation on behalf of the Regents of the University of California, which is now underway. The University filed a complaint in July alleging that a series of major retailers including Amazon.com, Bed Bath & Beyond, IKEA, Target and Walmart have infringed patents through the importation of certain filament light-emitting diodes (LEDs) and products containing the same. The ITC action is part of an enforcement campaign that is being hailed by the firm representing the university as a “first-of-its-kind university-led effort” to vindicate patent rights owned by the institution.

Perhaps the report on China’s strategy for eclipsing the U.S. lead in biopharma from the Information Technology & Innovation Foundation (ITIF) resonated so strongly with me because of several articles in The Wall Street Journal. Taken together, they present a sobering picture of what we’re up against. The first was a book review of “Leadership and the Rise of Great Powers” by Yan Xuetong, a prominent Chinese professor. Characterized as “a window into Chinese elite thinking about the world; it is as much a political manual as an international-relations text book.”  The thesis is the inevitable rise of China as the world’s dominant power at the expense of the United States.

A just-released study co-sponsored by the Biotechnology Innovation Organization (BIO) and AUTM provides new evidence of the significant contribution academic patent licensing makes to the U.S. economy. The report is the most recent in a series, and the numbers are astounding. This couldn’t come at a better time. Renewed efforts are underway to subvert Bayh-Dole from an engine driving innovation into a weapon for government price controls. Even though the Bush, Obama and Trump Administrations wisely rejected their theories, the critics keep banging the drum, and some in Congress are dancing to their tune.